The Covid-19 pandemic is changing an entrenched aspect of car shopping in America: finding your new ride on the lot and driving it home that day.
For months, dealer stocks have been running about 25% thinner than normal, a hangover effect from two months of pandemic-related factory closures last spring. The shortfall is requiring many buyers to order their cars and wait a few weeks, running counter to the American car shopper’s desire for instant gratification, and dealers’ impulse to send the customer home in a new car that day.
That change may outlast the pandemic as industry executives find that stocking fewer cars, amid high demand, has lifted profits for car companies and dealers alike. Now both are talking about carrying fewer vehicles on the dealership lot permanently, in what would mark a monumental shift in the way cars are sold in the U.S.
For decades, American car dealerships have kept endless rows of vehicles outside their stores in enough colors and variations for buyers to find what they want, when they want it. Reducing that mass of sheet metal would result in more customers preordering their cars weeks in advance, a practice common in Europe and elsewhere. The change could have implications for dealer-owned real estate and how car companies run their factories.
The benefits of leaner dealership lots have been an unexpected byproduct of the pandemic. Auto makers have been straining to boost output after the spring shutdowns, a task made difficult by an unexpected surge in demand for new vehicles. The result has been a seller’s market, with car companies able to hold the line on discounts, driving prices to record highs.